Contactless has become the norm for millions of consumers in the last few years.

Over 13 billion contactless payments were made in the UK last year, accounting for 69% of all debit transactions in December. With the raising of the contactless limit last October, the average value of contactless transactions also increased by 29%.

Contactless and electronic payments pose a dilemma for businesses. They can increase your profits by making it easier for customers to spend money, but you need a third party to process these payments. The two frontrunners are Stripe and GoCardless, but which is the best option for you?

Our hospitality, retail and eCommerce clients often ask us for advice. In this article, we’ll look at each of the pros and cons so that you can make an informed decision.


What does a payment processor do?

A payment processor is a company that acts as a mediator between a business and a customer. When a sale takes place, the payment processor provides a link between the merchant’s bank account and the customer’s bank account. As long as the customer has enough funds, it will authorise the transaction.

A payment processor is not to be confused with a payment gateway, although many companies provide both services. A payment gateway is a piece of software that gathers the customer’s information and encrypts it so it can be used safely by the payment processor.


What is the difference between Stripe and GoCardless?

New payment processing companies appear every day. For most businesses, it will come down to a choice between Stripe and GoCardless. Both services have been around for years and have gained a reputation for being reliable and user-friendly.

On the surface, there isn’t much to choose between the two. They both act as a payment gateway and a payment processor, collecting customer details, transferring them safely and authorising the payment in a matter of seconds.

They can also be integrated with automated accounting software such as Xero and QuickBooks, making it easy to incorporate electronic payments into your bookkeeping.

However, there are a few key differences to bear in mind:

  • GoCardless was initially designed for recurring payments such as subscriptions or payment plans. This means it takes payments in the form of a direct debit rather than a one-off debit or credit payment. However, there is no reason you can’t use it for single payments. It allows you to take a one-off direct debit which is functionally the same as a debit or credit payment.
  • Stripe is more geared towards eCommerce. It allows customers to make an online payment without being redirected to another site, making transactions considerably smoother. It’s also one of the only payment processors accepting cryptocurrency.
  • GoCardless is the cheaper option for most businesses, charging a flat rate of just 1% on all transactions. Stripe charges 1.4% for European cards and 2.9% for non-European cards.


Which is best for me?

Generally, we would recommend GoCardless over Stripe. It’s perfect for recurring payments but also practical for one-off transactions. Best of all, its lower fees will likely save you a lot of money.

On the other hand, Stripe is probably the better option if you’re an online retailer. Keeping everything on the merchant’s website offers unparalleled smoothness in eCommerce transactions. Its crypto capabilities may also prove helpful for businesses with an eye on the future.

If you sell online and in-store, there’s nothing to stop you from using both payment processors. This will require extra work, so it’s up to you to decide if it’s worth the hassle.

Sign up to Gocardless today and ease your receipt of payments


 If you’re still struggling to choose, give us a call for some personalised advice.